Trading Strategy & Analysis

25 February - 01 March 2019 Market Report

Copyright © 2017 Valesco Trading Group. All rights reserved

FOCUS POINTS

Summary

Key News

This week we will be focusing on fundamentals for the following currencies:

● USD● EUR● GBP● CAD

Technicals

Today we are focusing on the following pairs:

● DXY - US Dollar Index● EURCAD● GBPJPY● XAUUSD

Market Brief

USD

The week kicks off with December housing figures and February consumer confidence number on Tuesday. December factory orders and pending home sales are due out on Wednesday, ahead of 4th quarter GDP numbers and the weekly jobless claims figures. A particularly busy Friday has December’s core PCE price index and personal spending figures due out, ahead of manufacturing PMI numbers and finalized consumer sentiment figures for February. Outside of the stats, FED Chair Powell’s testimony Tuesday and Wednesday will garner plenty of attention ahead of a scheduled speech on Thursday.

EUR

Key stats through the week include consumer confidence figures out of Germany on Tuesday and the Eurozone’s consumer confidence figures on Wednesday. On Thursday, 4th quarter GDP numbers and January consumer spending figures out of France will be in focus. Inflation figures out of Spain, Italy, and Germany are also scheduled for release on the day. Focus on Friday will shift to finalized manufacturing PMI numbers, the Eurozone’s unemployment rate and inflation figures. Of greater influence will likely be February employment numbers out of Germany.

GBP

It’s another relatively quiet week on the data front. Key stats are limited to February manufacturing PMI numbers on Friday. While there will be some interest in the inflation hearings on Tuesday, focus through the week will continue to be on Brexit.

CAD

Economic data includes January inflation figures due out on Wednesday. Also in focus will be January’s RMPI due out on Thursday, while 4th quarter GDP numbers on Friday will be the key driver on the data front. Outside the numbers, the effects of U.S – China trade talks on market risk sentiment will also influence crude oil prices and the Loonie.

ECONOMIC CALENDAR

Previous Weekly Breakdown

The dollar has dropped past the channels medium to the downside which indicates further momentum south is highly probable.

DXY

Confluences

1. Bearish medium breach2. Channel support

Forecast

Price is likely to continue trading south towards the channel support.

Alternative scenario

A close above the medium will overrule this setup.

Chart Link

DXY Weekly Time-frame

Previous Weekly Breakdown

Price has formed a strong bearish marubozu candlestick which will likely push price further south this week.

EURCAD Weekly Time-frame

EURCAD

Confluences

1. Marabuzo candlestick trendline break

2. 1.48500 support

Forecast

The breach of the trendline will likely give sellers further momentum to lower the rate of this pair towards the 1.48500 support.

Alternative scenario

A close back inside the trendline will invalidate this setup.

Chart Link

Previous Weekly Breakdown

Some strong profit taking was evident during the latter part of last week when price reached a key resistance level. The most recent rally is continuing to show signs of strength as investors continue to increase the demand for the yellow metal.

XAUUSD Weekly Time-frame

XAUUSD

Confluences

1. Support at 1300.002. Resistance zone at 1370.00

Forecast

It is forecasted for price to test the resistance level at 1360.00 - 1370.00 where it is expected to consolidate.

Alternative scenario

A strong weekly close below last weeks low could potentially drive a price depreciation down to 1300.00.

Chart Link

Previous Weekly Breakdown

The precise bounce at 143.000 caused a new higher low to form which was in confluence with previous support. Price has now breached the previous lower high which would likely give buyers the confidence to continue driving price higher.

GBPJPY Weekly Time-frame

GBPJPY

Confluences

1. Support zone / Higher Low 141.002. Resistance level at 145.500

Forecast

The probability of this pair to hit the 145.500 is highly probable due to the strength in the recent bullish candlestick close.

Alternative scenario

A close below the support zone at 141.000 will discredit this bullish bias and likely cause a strong sell off below 140.000.

Chart Link

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MARKET REPORT DISCLOSURE STATEMENTS